Marengo completes refinancing with shareholder
PERTH (miningweekly.com) – Dual-listed Marengo Mining has completed a refinancing transaction with its major shareholder Sentient GP IV worth more than $27.5-million.
Under the terms of the agreement, Sentient has converted an unsecured interest-bearing debt facility to the amount of $10-million, along with interest of some $387 766 thereon into new debentures.
The shareholder has also exchanged its aggregate principal amount of $16.3-million outstanding debentures, along with the interest of $821 855 thereon, for new debentures, while also providing Marengo with a letter of support to ensure that the ASX- and TSX-listed firm had sufficient funds to maintain solvency for the next 12 months.
Each $1 000 face value debenture was convertible, at Sentient’s choosing, into common shares or chess depositary interest of Marengo, at a conversion price of C$0.02 per common share.
The conversion price would be adjusted in the event that there was a reorganization of capital or a new share issue. The debentures would mature at the end of June 2016, and would bear an interest rate of 9% a year, with the interest to be satisfied through the issuance of additional debentures.
Sentient and its entities currently hold a 21.97% shareholding in Marengo, and would hold some 69.94% of the company’s issued shares if all the debentures were converted.
Marengo has previously told shareholders that the Sentient transaction was the only ‘realistic option’ available to the company, warning that the company could go into default without the restructuring.
Marengo was looking to develop its Yandera copper/molybdenum/gold project, in Papua New Guinea, but the feasibility study on the project has been delayed after a third-party power supplier decided to withdraw from the supply agreement.
The company has been on the hunt for a new supplier ever since.
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